The card will work fine => and will indeed give a superb boost to gaming performance ... while the 3.0GHz P-IV isn't all-that-fast by today's standards; it's certainly a reasonable CPU ... and games are VERY dependent on GPU capabilities. The example of the gains seen by jordanrog was with a very good GPU already in the system ... in that case getting a faster CPU certainly helps ... but in this case you're going (I presume) from a basic GPU shipped with the 8400 to a MUCH faster GPU => there will indeed by a VERY nice gain in performance.
As for the power requirements ... either of the PSU's you're considering should work fine. The 700w unit would clearly have more "headroom" (extra power) ... but 500w should be fine. The 450w recommendation does indeed assume an E4500 CPU ... which draws 65w; but a 3.0GHz P-IV only draws 17-19w more than that (82-84w, depending on which specific stepping you have) ... so 500w should easily be enough. The only other concern with a Dell is to be sure you don't have one of their units that require a proprietary PSU pinout ... but the 8400 does not => it uses a standard ATX pinout [You can confirm that here:
http://support.dell.com/support/edocs/systems/dim8400/SM/techov.htm#wp1058366 ] ... so your standard ATX units will work fine.
The analog display will work fine ... the card is NOT "wasted" on this system !! :-)